Lithium ion batteries needed to power electric vehicles and plug-in hybrids will be in short supply later this decade unless manufacturing capacity is greatly increased, according to consulting firm PRTM.
The firm's findings contradict recent concerns that too much large-format lithium ion capacity is planned, says Oliver Hazimeh, head of PRTM's global mobility practice. But, he says, battery manufacturers will add capacity slowly -- in part because of bottlenecks in orders of production equipment.
Demand for batteries is likely to increase rapidly as the infrastructure is built to support EVs and plug-ins. By 2018 to 2020, consumer demand for battery-powered vehicles will take off, Hazimeh says.
"That's the driver -- at what point do you see an actual pull from the market?" he says.
Additional capacity investments beyond those recently announced by battery manufacturers will be required to avoid a shortfall of 30 percent by 2017, according to PRTM. The firm says total lithium ion battery market demand in 2020 will require about 200 gigawatt hours of capacity -- four times the capacity announced to date.